1. ACCOUNTING AND FINANCIAL STATEMENTS

2. Accountancy and related professions
accountants
Accounts Department, Accounting Department
bookkeeping - bookkeeper
accounting - accountant
auditing - auditor
MK, p.95

3. Accountants may have a specific focus
Management/managerial accounting
Tax accounting
Cost accounting
Historical cost accounting
Replacement cost accounting
MK:pp.95, 96, 98

4. Vital questions for any business
How much do we make?
Do we make losses?
How much do we own?
How much do we owe to others?
Where do we find cash if necessary?
What do we use cash for?

5. Which financial statements answer the previous questions?
The Profit and Loss Account -P&L
(The Income Statement)
The Balance Sheet
The Cashflow Statement

6. Opposites? 1. Credit 2. Revenue 3. Profit 4. Appreciation
5. Fixed (assets, liabilities)
Long-term (assets, liabilities)
6. Tangible
7. Accounts receivable
Debtors

7. Opposites? 1.Debit 2.Expenditure 3.Loss 4.Depreciation
5.Current assets/liab.
Short-term
6.Intangible
7.Accounts payable
Creditors

8. Opposites Credit Revenue Profit Appreciation Fixed assets/liabilities
Long-term a./l.
Tangible
Accounts receivable
Debtors
Debit
Expenditure
Loss
Depreciation
Current assets/liab.
Short-term a./l.
Intangible
Accounts payable
Creditors

11. Financial statements -revision 1
Where can the following information be found?
How much does a company owe? What does it own?
What are its sales and related costs and expenditure?
Where does cash come from? What is it spent on?
What does equity include?

12. Financial statements (RB p.70-75)
Balance Sheet: 3 parts? Adjectives used to describe them? What does each part include? What is the basic accounting equation? Adjectives? Synonyms? Profit & Loss Account(Income Statement:What does it show? What do revenues include? What do expenditures include? What happens with profits? Totals vs. expenses/deductions? Synonyms? Cashflow Statement: What does it consist of? Where does cash come from and go to?

13. net profit, loss, revenues, sales, cash flow, gross profit
………………… profit which remains after all costs, expenses and taxes have been taken away
…………………amount of money coming into and going out of a company
…………………spending more money than it is received
…………………total number of products that a company sells over a period of time
…………………money received from selling goods and services
…………………profit before taking away expenses and taxes

15. Put the following amounts in the correct order by their size.
Net profit
Earnings Before Interest and Tax (EBIT)
Reserves
EBITDA (Operating profit)
Gross profit
Total sales revenue (turnover, top line)
Slide: Courtesy of Boglarka Kiss-Kulenović

16. Key: Total sales revenue (turnover, top line) Gross profit EBITDA EBIT
Net profit (bottom line)
Reserves

17. Cashflow Statement : Inflows or Outflows
Cashflow Statement : Inflows or Outflows? Operations -Investments- Financing?
Dividends paid
Sales of property, plant and equipment
Income taxes paid
Proceeds from issuing shares
Purchases of property, plant and equipment
Receipts from the sale of goods and services
Repayment of debt

19. A few more terms used in accounting (MK, p
A few more terms used in accounting (MK, p.97): goodwill, share premium, common stock, pre-paid expenses, proceeds Source: Investopedia
costs such as rent, interest or insurance premium that are paid in advance
an intangible asset such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology
cash realized from a sale or received as a loan, after all commissions, expenses, fees, and taxes are deducted
the account to which the amount of money paid (or promised to be paid) by a shareholder for a share is credited to, only if the shareholder paid more than the cost of the share
a security that represents ownership in a corporation and gives rights to a company's assets only after creditors and preferred shareholders have been paid in full

20. Find the accounting terms that have the same meaning (AE & BE)
AGM Balance Sheet
Accounts Receivable
P&L Account
Common Stock
Creditors
Statement of Financial Position
Additional Paid-In Capital
Income Statement
Net Income Profit
AMS (ASM)
Ordinary Shares Debtors
Share Premium Accounts Payable

21. How many accounting terms can you identify in the next slide?
Source: MacKenzie, I. (1995) Financial English. LTP

23. Translate the following:
Dobit nakon oporezivanja
Zalihe
Dugotrajna imovina
Dobit od redovitog poslovanja
Ukupne kratkoročne obveze
Zadržana dobit
Materijalna imovina
Prekoračenje računa
Sumnjiva i sporna potraživanja
Troškovi redovnog poslovanja
Nematerijalna imovina
Potraživanja
Amortizacija
Obračunato, neplaćeno

24. Accounting in real life ...

25. Identify some of Agrokor’s stakeholders in the pictures below
Identify some of Agrokor’s stakeholders in the pictures below. Who are they and what is at stake?

26. Study the following financial statements (follow the links below):
Compare the main elements (e.g. total assets, total revenue) of Google’s three main financial statements for 2008 (MK: p.97 & 99) and b) for 2016 (see the link which follows):
2. Study Agrokor’s annual report for 2015 and find summarised financial statements for its four subsidiaries in 2015 (pp of the computer page numbering)
Assignment: Be ready to answer a few simple questions in class
using the above financial statements on your smartphones or as printout.

27. Assignment (Part 1) Google’s financial statements
1.The Income Statement (P&L) a) types of costs and expenses b) 08 vs. 16: tot. revenue, tot. operating expenses, net income 2. The Balance Sheet: Show the basic accounting equation using the example of Google’s figures for The Cashflow Statement: a) Three types of cashflow? b) Which of the three was on the increase in 2016?

28. Assignment (Part 2) Agrokor’s financial statements for 2015 (pp.81-83)
4. What synonym is used for ‘fixed’ assets?
5. What is meant by ‘net result’?
6. Which subsidiary had positive cashflow in 2015?